Residential dwelling values in Melbourne returned to trend in January with a 2.7 per cent rise recorded by CoreLogic RP Data in the latest home value indices results (read results here).
This sets the Melbourne property market up for another stable year with moderate value increases likely, particularly in the detached house market. Melbourne home owners have seen stable growth in values for two years now and are more likely to record a profit when selling now.
House values in the city grew the strongest with a 2.8 per cent rise compared to 1.7 per cent for units. This takes the growth in values over 12 months to 7.5 per cent for houses and 2.7 per cent for units.
The rise in property values will be welcomed by vendors seeking to sell over the summer and in autumn as it suggests the poorer performance recorded in November and December last year was a consequence of high supply levels in spring and summer.
Demand is not limitless and there is still some caution from buyers.
Based on settled sales the median price of a house in the past three months was $613,000 and $480,000 for a unit.
The performance of the auction market provides little indication of the markets health due to the very low auction numbers in January and their geographic diversity. Volumes are likely to rise strongly over the next few weeks.
Melbourne continues to have the lowest rental yields in Australia with 3.2 per cent for houses and 4.2 per cent for units. This does not appear to have a negative impact on investors who are happy to wait for capital gains.
Victorian Housing Market Specialist
CoreLogic RP Data